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Ann works as a consultant in Washington, DC. She has preferences over goods x,y and z represented by the following utility function: U(x,y,z)=1/3ln(x) + 1/3ln(y)

Ann works as a consultant in Washington, DC. She has preferences over goods x,y and z represented by the following utility function:

U(x,y,z)=1/3ln(x) + 1/3ln(y) + 1/3ln(z)

Suppose that she's endowed with ex, ey, ez amount of these goods, and she faces prices px, py, pz . Suppose that Ann's current wage is wDC and that her labor supply is inelastic and equal to 1, l=1 (we assume she doesn't value leisure at all).

From now on, assume Ann's DC endowments are ex=ey=ez=100 and that her current wage is wDC=60. Calculate Ann's utility from working in DC, u0

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